We are initiating coverage on SunCal Companies, a self-described "development company in the western United States," as seven SunCal entities have recently filed for Chapter 11 bankruptcy. One astute forum member has reported:

Both the L.A. Times and Sacramento Bee are carrying stories today, November 7th, cited below, indicating that separate SunCal entities filed Chapter 11 bankruptcies today in the U.S. Bankruptcy Court for the Central District of California, Santa Ana branch.

All seven of the new cases were assigned to Bankruptcy Judge Erithe Smith, who is already the judge assigned to the 4 involuntary cases filed against Lehman Brothers Real Estate Partners, LP owned and dominated entities (to the extent of 85%). Those involuntary cases were filed by junior mortgagees and mechanics lien claimants. Just last week, Judge Smith appointed Alfred Siegel of Sherman Oaks, California as Chapter 11 Trustee in the four involuntary cases.

You can find the full write-up by "Aristotle" below in the comments to this post, which are pulled from the original forum posting. It appears that these filings are related to the implosion of investmeent banker Lehman Brothers, the sole funder of the Bickford Ranch project (See this article on Bickford Ranch's bankruptcy filing).

Further to SunCal's "about" page:

Today, SunCal Companies has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout more than 50 projects. You may be familiar with some of our master-planned communities. You might even live in or visited one and not even know it. Some of SunCal's successful developments include Amerige Heights in Fullerton, Lincoln Crossing near Sacramento and Terra Lago and Fairway Canyon near Palm Springs.

Dallas-Fort Worth home builder Twinmark Homes (website: twinmarkhomes.com) appears to be having some difficulties. We've heard a number of rumors to this effect, and the Star-Telegram recently reported that tenants renting a home from a Twinmark entity are seeing their house foreclosed on by the bank:

The Manuels say they have paid their $1,500 rent every month to JEMH, an entity of Twinmark Homes of Fort Worth. They are not building equity through the rental program, but had a verbal understanding that they could buy a home as soon as they could elevate their credit standing. The Manuels say they have also put in $10,000 worth of appliances, installed phone and cable lines, and added a flower bed because they believed that they would one day own the house. . . .

Colonial Bank is foreclosing on the Manuels' house. The home is also collecting liens from construction product companies that say in court filings that the builder owes money. . . .

Justin Arnold, who owns the company with Matthew Arnold, referred calls to the company's attorney, who often handles bankruptcy cases. She did not return phone calls seeking comment. A check of court filings Thursday shows that Twinmark Homes has not filed for bankruptcy.

The article goes on to note various lawsuits that have been filed against Twinmark for monies owed.

One informant tells us that Twinmark had around 80 starts a year and had a "6 subdivision presence."

Finally, another tip we received indicates that Twinmark is unable to build new homes due to banks not loaning them money. Per the tip:

I [knew a person who went] to buy a new house to be built from the ground up. The sales manager told [this person] that they were not building any new homes. The banks are not loaning them any money to build new starts.

If anyone can update us regarding Twinmark Homes or provide clarification as to their status as a going concern, please let us know.

Lafayette, Indiana-based homebuilder Gunstra Builders (website: gunstrabuilders.com), a company founded in 1976 by Bruce Gunstra, appears to be in dire straits. We first received tips that Gunstra might be "shutting down" on October 15th. We posted this rumor on our forums requesting confirmation. Soon, at least three forum members posted that they had heard Gunstra was either going bankrupt or that their "doors were closed". Per one post:

I manage a property for someone that built a Gunstra condo in Plainfield. They let me know a few days ago that Gunstra is bankrupt and has shut it's doors. I called the main office # I have for them, it is "temporarily disconnected" Their main office is about 5 minutes from my house, I am going to stop by tomorrow and see.

Another Gunstra homeowner on our forums heard similar news that Gunstra was "going bankrupt". On October 30th, IndyStar reported that Gunstra has shut down their sales offices and disconnected certain phone lines:

Lafayette-based Gunstra hasn't commented publicly on its viability. Calls to its main office went unanswered Tuesday and Wednesday.

Phones are disconnected to at least seven Gunstra communities where the company is building homes in Indianapolis, Carmel, Fishers, Plainfield and Zionsville.

With such bad news piling up, unanswered phone calls and spreading speculation of shutdown and/or bankruptcy, we can only wonder if Gunstra is only a short breath away from implosion. Gunstra Builders had some 60 - 76 employees and was involved in a number of single family home and townhome projects. If anyone can provide additional data as to their ongoing status or their peak size (i.e. approximate closings per year at peak), please comment below or email us.

From the Baltimore Business Journal comes word that Maryland-based home builder Altieri Enterprises d/b/a Altieri Homes (website: altierihomes.com) has been cutting staff and building debt:

Facing nearly $2 million in debts to creditors across Maryland and liens on several of its homes across the mid-Atlantic region, Altieri Homes of Columbia is struggling to stay afloat, company President Daren Altieri said. By taking the right steps, he said the company will avoid filing for Chapter 11 bankruptcy protection.

Deep into a nationwide housing slump, which still has a firm grip on Greater Baltimore, the company has been forced to slash its staff from 105 to seven employees, eliminate several communities from its pipeline and turn over much of its construction and marketing work to outside firms. Even with those efforts, Altieri said, the company does not expect to reach firm financial footing for at least another year or more.

Another article details the woes of various Altieri homebuyers. One example:

Residents in Brook Meadow, a 36-unit townhouse development along Mulberry Drive, are seeing liens placed on their homes by subcontractors who claim Altieri never paid them for their work.

"We had to cut our losses," said Sandra Armstrong, who signed a contract in January 2007 for a home in Foxwood Estates that was supposed to be finished in August.

A tipster with close information on the company has provided us with some additional speculation regarding the source of Altieri's woes:

Too much land which leads to too much interest carry.

At this point the owners still show up at the office but are close to being evicted for not paying rent. The doors are locked and the blinds are drawn. Communication with them is impossible.

... Too much debt, too many judgements / creditors, NO cash.

We are keeping an eye on Altieri. According to Manta.com Altieri was founded in 1991 and had estimated sales of $86 million in recent history. If you have any information regarding their ongoing operations, please let us know! Also, be sure to check out the forum discussion on Altieri Homes.

2008-06-11:
Comstock Homebuilding Companies
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Public Home Builder
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story

We heard just now that Comstock Homebuilding Companies, Inc. (comstockhomes.com received a going concern opinion from PricewaterhouseCoopers regarding their 2007 audit. A going concern opinion is an expression that the company being audited is facing adverse market conditions. Per an article on the going concern opinion:

PricewaterhouseCoopers, indicated their belief that declining market conditions and the significant amount of the Company's debt which matures in 2008 creates substantial doubt that the Company would continue operating as a going concern.

This announcement is in compliance with the Nasdaq Rule 4350(b)(1)(B) requiring separate disclosure of receipt of an audit opinion that contains a going concern qualification, and does not reflect any change or amendment to the December 31, 2007 financial statements which were prepared by the Company as if it would continue operating as a going concern. The Company's financial statements were filed with the Securities and Exchange Commission on March 24, 2008 in connection with the Company's Current report on Form 10-K for the year ended December 31, 2007.

The article goes on to note that Comstock's primary markets are Washington, DC, Raleign and Atlanta.

We're getting additional reports indicating further that Reeves Williams may be in trouble. While we vet these out, we've been directed to a recent article published at commercialappeal.com. Per the article:

Office doors were also locked in Franklin Farms, the company's only remaining subdivision in Shelby County. There are 75 lots and five completed houses in the subdivision near the intersection of U.S. 64 and Houston Levee in Cordova. ...

"We have suspended sales on the subdivision as well as the Mississippi subdivisions pending a decision on how to sell these homes in the future," he said. "In addition, we have closed down our Web site as sales leads have slowed to a trickle, and this was no longer a necessary expense."

Closing the sales offices is the result of 18 months of downsizing "to meet the level of sales in the marketplace."

Original post - 2008-05-20:

According to myeyewitnessnews.com, Mississippi Homebuilder Reeves Williams, a subsidiary of Kalian Companies, is "closing all of its sales offices and selling some of its properties".

A spokesman for the company, Doug Heppe, as stated that Reeves Williams has no plans to file for bankruptcy. We'll be keeping an eye out to see if anything further develops.

Pulte Homes Inc. had forecast a profit for its fourth quarter in the range of break-even or $0.10 per share. Unfortunately, their 4Q results and the forecast did not match. Reported Q4 earnings came in $3.46 or a loss of $874.7 million, and included a charge of $543.3 million on inventory, land and goodwill impairment. The loss is tacked on to the billion dollar bite out of earnings Pulte took the previous quarter and won't help the junk rating already given the company's debt (S&P).

Things are going so badly for Centex that even a home give-away promotion, which generated more than 250,000 entries ended in dispute. The contest had two winners and now Centex offered to build two homes, a doubling of losses of sorts. These were not the only unexpected losses for the home builder.

D.R. Horton, Inc. had net earnings in 2005 at the top of the housing bubble of nearly $1.5 billion (financials). However, for fiscal 2007 (YE 9/30/2007) the company reported a net loss of approximately $700 million. Per a Bloomberg article on D.R. Horton's Q4 2007:

The quarterly results included pre-tax charges to cost of sales of $278.3 million of inventory impairments and $40.3 million of write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue.

This comes after posting a loss of $823.8 million in the prior quarter. The builder has been getting unwanted land off it's books (linklink) as it blames charges due to inventory and the value of land options for the swing into a loss in the fiscal fourth quarter (5).

In November 2007, the credit rating agencies started piling on with S&P cutting the builder to junk and Goldman Sachs following up in December by cutting estimates. The company's stock (DHI) traded to near $45 in 2005 and as low as $10 in 2007. As of Nov. 2007 D R Horton employed 6,231 people.

For KBH Home the zenith came at the top of the housing bubble with a profit of $842.4 million in 2005 which has fallen off to $482.35 million in 2006 and crashing to post a $929.41 million loss for the year 2007. The company delivered 37,140 (link) homes in 2005 vs 23,743 new homes in 2007 (link).

For the fiscal fourth quarter 2006 KBH Home reported recorded losses of $772.7 million, with revenues of $6.42 billion, down 32 percent from 2006. The company stated that it was looking forward to another tough year in 2008.

The results for the fourth quarter led to downgrades from Merrill Lynch and Citigroup which downgraded the entire sector (linklink).

In addition KB Homes stated that the Securities and Exchange Commission was conducting a formal investigation into its stock option granting practices. They also face a shareholder lawsuit that "has been commenced, in the Central District of California, against certain members of the board of directors and certain executive officers of the Company. The complaint alleges that certain current and prior officers and directors manipulated the prices of executive and director stock option grants (a.k.a. back-dated stock options)."(link) In another legal matter KB Home was one of six builders who have agreed to pay $1.4 million to "settle federal allegations that they illegally established title insurance companies that took payments for a portion of the insurance risk."

Hovnanian Enterprises, one of the biggest publicly traded home builders, may not survive the crashing housing market. The builder reported fourth quarter net loss available to common stockholders of $469.26 million or $7.42 per share, compared to a loss of $117.93 million or $1.88 per share in the year-ago quarter (link). The four fold increase in losses was due to tighter credit and foreclosures dumping houses back onto the market (Per app.com. Since the fourth quarter earnings announcement Fitch, Moody's and S&P have downgraded the credit ratings of Hovnanian(linklinklink). Despite the prospect of future rate cuts the out look for all the builders remains challenging(6). The principal problem for Hovnanian is falling deliveries amid rising cancellations. In fact Hovnanian is selling at deeper discounts and squeezing its margins as the housing crisis continues. And even as Hovnanian struggles with lenders and fends off acquirers (link) it scavenges the valuable land of other beleaguered builders, becoming at once predator and prey:

"I hate to feel like a vulture, but in every cycle we have typically bought land from other builders that have gone in bankruptcy," Ara Hovnanian, chief executive of Hovnanian Enterprises Inc., said at the Reuters Housing Summit in New York.

"We have already looked at parcels of several other builders in bankruptcy."

The company is due to report first quarter 2008 results on March 10. CEO Ara Hovnanian has said "The end of '08, personally, will be the bottom and the turning point.". We believe its important to point out that a bottoming out in housing hardly implies things will immediately get better. Housing turns slowly, and whether or not Hovnanian will weather that turn is entirely up in the air.

Times were good for Calabasas, CA-based Ryland as it recorded positive earnings for fiscal years 2003, 2004, 2005 and 2006. Profits topped out in 2005 at $447.05 million. For 2006 net earnings came in at $359.94 million. The corresponding stock price rode the trail up from under $20 in 2003 to over $80 per share in 2005. But the fall from grace for Ryland began from just above $60.00 as the 2007 earnings were nearly the negation of those in 2006 at $(333.5M).

Ryland employed about 2,800 people as of December, 2007.

The first hint that something was awry did not come until the company issued guidance in April and warned that it expected to report a fiscal first quarter loss for 2007. Reaction was strangely muted in both financial media at in the stock price. The shares hovered there above $40.00 until the end of May when the chart took a turn in the form of a straight line with a 45-degree downward slope. That trend continued into the low twenties in October. From there each attempted rally was met with more bad news and another sell off. The first dead cat bounce above 25 was hit by a downgrade by Citigroup which took a swipe at a swath of homebuilders.

To date, the company continues to report lower asset write-downs than its peers, but we believe more charges are likely in the first half of 2008. We are lowering our 2008 EPS estimate to $0.80 from $0.90. Applying 1.15X price-to-book, a premium to peers, we are maintaining our 12-month target price of $31."

The call for any positive earnings strikes us as a little bit optimistic given the unabated downward plunge of the housing market in general. But they make a good point about write-downs; Ryland has not had many, and there will likely be more (our data, as of around the beginning of 2007, had Ryland with about 13% of book in land options before the bubble burst, and a further 1% in joint ventures). But this simply suggests to us new write-down losses piled on top of market losses—not exactly a recipe that would cause a swing back to a per-share profit. But we'll see.

In sum, Ryland definitely does not seem as distressed as many of its peers; but it is certainly feeling the pain of this market.

The Irvine-CA based Standard Pacific Homes, the subject of bankrupcy rumors throughout 2007, is still scraping along. However, their full-year 2007 results (announced Feb. 4) leave little room for comfort, as the company lost $767M for the year, as compared with a gain of $123M in 2006. More on the nature of the losses from the linked article:

The value of the builder's 1,279 units in backlog plummeted 50 percent to $442.7 million. For the year, StanPac's average selling price softened by 6 percent to $377,000, and the availability of mortgages resulted in some "softening" in the sales of higher-priced homes, particularly in California.

...

In the fourth quarter alone, StanPac lost $440.9 million, compared to a $98.4 million loss in fourth quarter 2006. That loss is attributable to $276 million in impairment charges on 62 projects, a $36 million increase in joint-venture related losses, and the set-aside of a $180.5 million deferred tax-asset reserve. Including discontinued operations in San Antonio and Tucson, Ariz., where StanPac exited last year, the company's total pretax impairment charges for 2007 were $1.09 billion.

...

Zelman & Associates, an investment and research firm, estimates that the $281 million StanPac generated from land sales last year may have represented a 70 percent discount from what the company had originally paid for that land.

...

Throughout 2007, and especially in the second half of last year, investors and analysts voiced concern about Standard Pacific's joint-venture exposure. In the fourth quarter, the company got out of six joint ventures and reduced JV-related debt by 39 percent to a still-high $771 million. Scarborough says he's confident that the company would continue to reduce JV debt through 2008.

Pretty grim. But there's more:

In the fourth quarter, the company's gross margins from its home building operations were negative 17 percent. During that quarter, the company was not in compliance with tangible net worth covenants for its $900 million revolving credit, and two term loans totaling $325 million. It has received a waiver of those covenants from its banks that extends through March 31.

To us—and apparently S&P—all this suggests a worsening rather than improving situation, but sure enough, some analystsdisagree (perhaps they are comforted by the $235M tax refund all these losses will generate in 2008). We wonder what exactly the cash cow is going to be with the core business (building and selling homes) having switched to a money-loser. Given that, cash flow is currently coming from sales of JVs and other assets—at steep discounts, to boot. While the company may be able to stay afloat for a while on that plan, by definition it means continual hits to shareholder equity.

An improvement of SPF's trajectory seems like it would require the market to bounce back soon. Otherwise, in an environment of rising costs and falling home prices, we are at a loss to figure where SPF is going to generate profits from. In light of that harsh reality, creditors may not be willing to waive SPF's debt covenants next time around.

The Atlanta-Journal Constitution recently posted a piece concerning John Wieland, who has recently suspended construction on a $350 million luxury condominium project in midtown Atlanta. As there is no shortage of condos in midtown Atlanta either in the process of completion or having been recently completed, we believe this was likely the right decision.

Per the AJC article, John Wieland has been "shocked" by the downturn in housing. The AJC notes:

"The end of last year was the most miserable time of my life," Wieland said.

...

"I am shocked, and I don't shock too easily," he said. "I don't know anybody out there that is 'doing well.' And the bankruptcies of the builders in Atlanta are starting."

But a new promotion offering price discounts up to $100,000 and a lifetime structural warranty on Wieland houses produced 89 sales for the company between Jan. 25 and Feb. 3, twice the number of homes the company sold in the same period last year, according to Wieland officials.

Though the steep discount was able to drive up sales for Wieland, the company is still marketing some 30 communities and over 400 homes still in inventory. Regarding ongoing sales at Wieland, the AJC notes:

"It takes more visits these days to get people to make a buying decision than it did a year ago," Wieland said. Currently, he said Wieland buyers are averaging 71 days between first contact and purchase commitment, up 29 percent from the 55-day average a year ago.

The Atlanta area has some eleven months in unsold inventory. Despite the downturn, Wieland believes his company will survive.

Beazer Homes USA, the Atlanta-based homebuilder, has encountered a number of problems as the housing bubble has burst. From investigations by the SEC to late filing and nearly going into default on their bonds, Beazer has not had an easy road. Below is a round-up of news on Beazer's woes, newest to oldest:

2008-02-01: Beazer Homes announced on February 1 that they "will pull out of five markets: Charlotte, N.C.; Cincinnati and Columbus in Ohio; Columbia, S.C.; and Lexington, Ken.". Further to the article, Beazer is teaming up with the mortgage industry's favorite whipping boy, Bank of America-Bride-to-Be, Countrywide Financial. Per the release:

The company will establish a new marketing services arrangement with Countrywide Financial Corporation. "We believe the strategic actions we are announcing today will position us well to take advantage of opportunities that will arise when our markets begin to recover," said Ian J. McCarthy, president and chief executive officer, in a prepared statement.

2008-01-23: Beazer presented at a JPMorgan investment conference. According to their presentation, their year over year closings were down some 24 percent with new home orders dropping by 29 percent according to this article from the AJC. The AJC quoted Beazer CFO Allan Merrill regarding 2008; he said, "Our expectation is that this year is going to be very tough."

The AJC article further updates on expectations regarding financials from Beazer as well as the ongoing investigations:

"We are working extraordinarily hard on getting these things completed," Merrill said.

New financial statements should be available well in advance of the May 15 deadline Beazer negotiated with its creditors, who were demanding payment of $1.5 billion in loans to Beazer because of the company's failure to file quarterly financial disclosures.

Merrill cited company layoffs -- 650 last fall -- and its decision to suspend quarterly dividends as evidence of Beazer's commitment to surviving the anticipated economic downturn in 2008.

"The wild card this year is whether or not there's a national recession," Merrill said.

In addition to the staff reductions -- which have cut the company's workforce in half, Merrill said -- Beazer has also reduced its land holdings, pared down the range of options it offers buyers in everything from floor plans to plumbing fixtures and even reduced prices on its homes in some locations as much as 30 percent to stimulate cash flow, according to Merrill.

U.S. recession a "wild card"? That was remotely believable three months ago, but today? Not a chance.

2008-01-12: Mike Drummond of th Charlotte Observer does a nice recap of Beazer Homes. One gem on Beazer's prior denial of any housing "bubble":

"The so-called housing `bubble' is, in fact, a myth," it said in its fiscal 2002 annual report. "While many continue to wait for this bubble to burst, we agree with most respected economists that there has never been a national housing bubble in the U.S."

Drummond further notes how the Observer found 77 out of 406 home buyers in a Beazer subdivision lost their homes to foreclosure in 2007. Drummond's entire write-up is well worth a read.

2007-11-06: This Bloomberg article details how Beazer would soon be engaging in settlement talks with the Department of Housing regarding investigations by HUD into Beazer mortgage employees violating rules related to HUD's downpayment assistance program. The article further notes that Beazer cut 650 jobs (25% of the workforce) during the month of October and would be suspending the dividend.

2007-11-06: Another Forbes article writes about calls by CTW Investment Group, a shareholder activist group, for Beazer's CEO to be replaced. From the article:

The Washington-based CTW Investment Group said McCarthy allowed Beazer to violate federal law, improperly account for land development costs and sale-leaseback transactions, and provide undisclosed loans to executives, all while pocketing $57 million in total compensation over the last five years - among the highest pay packages for a CEO of a company of Beazer's size.

It must be tough being a CEO: when your company does well, you make millions. When your company takes a turn for the worst, well, you make millions then, too!

2007-10-29: Forbes writes on Beazer finally striking a deal with its bondholders to amend the terms of $1.5 billion in debt in order for Beazer to avoid default. Bond agreements contain certain debt covenants that require companies to provide financial reports within so many days after a period end. Beazer had failed to comply with regard to these covenants.

In order to avoid default, Beazer offered a $5 fee per $1,000 bond to all who would agree to new terms, allowing for Beazer to delay financial reporting. Apparently, $5 was not enough -- Beazer ended up having to pay $12.50 per $1,000 in order to get the amendment passed.

The amendment will allow Beazer to delay financial reporting on their 2007 results until May 15, 2008.

The recent quarter's loss included pretax charges of $130 million for real estate-related and joint venture valuation adjustments, $58 million for goodwill write-offs, $11 million for the acceleration of expenses related to the cancellation of employee stock options and $3 million for impairment of golf course assets held for sale.

In comparison, 2006 period included a pretax charge of $63 million related to real estate-related valuation adjustments.

For the full year 2007, Meritage posted a loss of $288.9 million, or $11.01 per share, compared with a profit of $225.4 million, or $8.32 per share, in 2006. Total closing revenue fell to $2.34 billion from $3.46 billion the year before.

In 2006 Lennar Corporation posted profits of $594M on 49,568 new home deliveries but by year end 2007 those numbers were $(1.94) billion and 7,044 respectively. The share price dramatically reflects the change of underling fundamentals—trading well over $60.00 a share in 2005 and for $56.54 a share as late as January 2007—but from there it traded in a straight line down to $12.00 in December 2007. Of the $1.9 billion annual loss $1.25 billion came in the fourth-quarter (the biggest loss in the company's history). The results are nothing less than catastrophic as they eviscerated earnings from the two previous years combined and leave the company reeling.

'Revenue tumbled 49 percent to $2.18 billion from $4.27 billion in the 2006 period, as home deliveries fell 50 percent to 7,044 homes, and new orders slid 50 percent to 4,761 homes with a cancellation rate of 33 percent.

The results topped expectations of analysts surveyed by Thomson Financial, who had forecast a loss of $1.65 per share on revenue of $2.06 billion. Those estimates typically exclude one-time charges such as land write-downs.

The company cut its work force by 35 percent in 2007 and, in November, Standard & Poor's cut Lennar's credit ratings to junk status.

For the year ended Nov. 30, Lennar's losses equate to $12.31 per share, compared with profits of $593.9 million, or $3.69 per share, in 2006. ' The remaining workforce consists of 12,605 as of November 2007.

In fact in 2007 all the sharks smelled Lennar's blood in the water and they ganged up on the struggling company in a seemingly coordinated pre-earnings attack. First company vice president Lennar Marshall H. Ames sold 30,000 shares of common stock, for $18.01 apiece; though he took a $300,000 loss, it further depressed the shares. Then Deutsche Bank and Citigroup joined the chorus of downgrades and finally the options sellers took their chunks of meat.

Since late 2007 the company has been engaged in a frenzied attempt to raise cash, selling nearly 8,300 home sites in Florida, another 741-acre Stoneybrook North development site in North Fort Myers, the upscale Federal Hill project in Maryland and 11,000 home sites for $525 million to Morgan Stanley's real estate unit. The company has not only been taking massive losses on deals like this, it has also had the impact of unloading various joint ventures and writing-down worthless land options as a continuous drag on its net income. From the 2007 10K:

Loss on land sales totaled $1.2 billion, which included $740.4 million of FAS 144 valuation adjustments on the inventory acquired by the Morgan Stanley land investment venture discussed below, $229.7 million of FAS 144 valuation adjustments and $217.6 million of write-offs of deposits and pre-acquisition costs related to 12,500 homesites under option that the company does not intend to purchase.

Another way Lennar is frantically raising cash to survive is moving retail units more aggressively. The company is leading Central Florida in number home closings 'through the first nine months of the year with an average of 52 per month,....'. The share price has responded to "positive" developments like these by rebounding to the $17 zone, and the company even managed to get an upgrade. But sales increasing as home prices are declining at historic rates won't translate to profits on the bottom line. Unfortunately for Lennar, we see little let up to all of these negative trends, so to us they remain solidly "ailing".